The Future of the ACA – Day One of Donald Trump’s Administration

By Justin Eckman

January 20th, 2017 marked the inauguration of Donald J. Trump as The United States of America’s 45th President. Mr. Trump had successfully campaigned on hardline promises of repealing the Affordable Care Act, President Barack Obama’s signature healthcare policy, and one of his first official acts as president was in regards to the law that covers 20 million Americans.
Shortly after he officially became president, Mr. Trump issued executive order 13491, entitled, “MINIMIZING THE ECONOMIC BURDEN OF THE PATIENT PROTECTION AND AFFORDABLE CARE ACT PENDING REPEAL.” While this executive order sends a strong message as to what the Trump administration’s policies and priorities will be, the questions remains, how much can this order actually change the Affordable Care Act?

To answer that question, we have to look at what exactly an Executive Order is. The easiest way to do that is to imagine the Federal Government as a business, and the President as the C.E.O. of that business. Imagine if in a business, there was a company policy that stated that all employees must dress professionally at work every day. But that policy itself leaves a wide range of interpretation. However, the C.E.O. of a company, by the power vested in her as head of the company, could interpret that policy to mean that men will wear navy suits with red ties, and women will wear grey skirts with black flats, and issue a company-wide memo that establishes these further rules. The company is still observing the policy, but the C.E.O. has instructed her employees in more detail concerning how the policy should be carried out.

In much the same way, the President of the United States is charged with enforcing the laws that Congress passes. Because Mr. Trump is the chief of the Executive Branch of the United States, he can issue Executive Orders to his employees that instruct them on how to interpret and enforce the law, which, in this case of Mr. Trump’s executive order signed January 20th, is the Affordable Care Act.

Signing an Executive Order does nothing to change the Affordable Care Act, and it is likely the primary reason for signing this order is symbolic; Mr. Trump wants to signal to his base that he is serious about the campaign promises that he made. Section I of the relevant four sections in the order makes it clear that, “It is the policy of my Administration to seek the prompt repeal of the Patient Protection and Affordable Care Act,” and “In the meantime, pending such repeal, it is imperative for the executive branch to ensure that the law is being efficiently implemented, take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act.” Besides expressing a desire for the States to have more individual control over how healthcare is managed, the first section offers no concrete decrees.

The remaining text of the order is equally vague, with only section II giving a glimpse of how this order might affect the current implementation of the Act. Section II states that, “To the maximum extent permitted by law, the Secretary of Health and Human Services (Secretary) and the heads of all other executive departments and agencies (agencies) with authorities and responsibilities under the Act shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”

It is important to note the use of the words “waive,” and “grant exemptions from,” in the language of Section II of the executive order. This language offers a small glance into how this order could possibly affect the current market, and addresses two of the less popular portions of the law, the individual and employer mandate. Currently, the individual mandate provides that all Americans who can afford health insurance must purchase health insurance, or face a penalty. Likewise, employers are required to include certain provisions in the healthcare plans they offer, or they too face a penalty. Under the current law, the only way to avoid these penalties is by appealing your case to the Department of Health and Human Services, who has the power to waive the penalty in the case of an employer, or grant exemptions from the individual mandate. In both cases, the law itself allows exemptions and waivers to be made, but only in the case of “hardship.”

Just like the C.E.O. of our earlier example, it appears that Mr. Trump has provided more specific instructions on what a “hardship,” should be defined as. Specifically the order instructs his administration to delay implementation of anything that would cause a, “cost, fee, tax, or penalty.” The individual and employer penalty would both fall under that definition.

The remainder of the order instructs the agencies over which Mr. Trump presides to seek out ways to transfer power to the states in healthcare decisions, and to seek to create a more open market to for interstate healthcare policies, both of which have been talking points of his Republican colleagues in Congress.

How Mr. Trump’s executive order will affect the implementation of the Affordable Care Act remains to be seen. Employers and individuals seeking exemptions under the law still must apply for those exemptions in writing, and the window to do so only opens at certain times of the year. The only long term effects of this order are likely symbolic, proving to his supporters and Congress that Mr. Trump’s administration is ready to play hard ball with the Affordable Care Act.